Privatized public services are under scrutiny in the region

www.latintrade.com 02/28/2003 - Source: BNamericas Whether Latin America is on a leftward tilt is open to debate, but what is certain is that almost everywhere there is a move to review the privatisation drive of the 1990s, particularly in the area of public services. In most cases, the revision aims to start with a strengthening of the state's regulatory powers.

On 19 February, Brazil's President Lula da Silva outlined a get-tough approach in this area at a lunch with leaders of the ruling Partido dos Trabalhadores (PT). The main message was that the powers of public service regulators should be enhanced 'so as to better serve the interests of the state and the people.'

Roberto Jefferson, leader of the PT bloc in the chamber of deputies, said this was a reaction against what amounted to 'the outsourcing of political power in Brazil'.

The first step will be the submission of a bill to congress ordering a review of the regulatory agencies. Lula's mood, as summarised by Jefferson, is that these agencies have become 'a parallel power' with officials 'that even the President can't dismiss.'

This may be the most high-profile instance of the regionwide drift, but examples are on hand almost everywhere.

In Bolivia, in the recent cabinet reshuffle, President Gonzalo Sánchez de Lozada appointed Juan Carlos Virreira, who had served him earlier as trade minister, as presidential delegate in charge of auditing the performance of the companies operating the privatised public services.

It was under Sánchez de Lozada's first presidency (1993-97) that most of the privatisations were carried out.

In Argentina, the executive's hand is currently being forced by a judge, who has ordered the operator of a railway line, Transportes Metropolitanos General Roca, (andthe government) to start providing a 'worthy and efficient railway service [offering] minimal conditions of hygiene and security' within 30 days.

At least two of the contenders in the April presidential elections, Néstor Kirchner and Adolfo Rodríguez Saá, have been calling publicly for a review of privatisations in the oil and rail sectors.

In Peru last year, widespread protests forced the government to abandon a power privatisation drive. A similar mood prevails in neighbouring Ecuador. In Central America, where the FMLN feels that it may finally be heading for power, a review, if not rollback, of privatisations figures very high on their agenda.